The rise of large farms: drivers and development outcomes.

Author:Byerlee, Derek

A recurring debate in the development literature is the relative emphasis to place on the roles of small-scale farms versus large-scale farms in fostering agricultural growth, and economic development more generally. In the 1960s, T.W. Schultz's landmark study, Transforming Traditional Agriculture, convincingly argued the case for the efficiency of small-scale family-operated farms and their responsiveness to new markets and technologies. Together with the success of Asia's green revolution when hundreds of millions of small-scale farmers rapidly adopted new technologies, this placed small-scale farm productivity at the centre of the development agenda. Recent reviews (Eastwood et al. 2010; World Bank 2007; Wiggins et al. 2010; Christiaensen et al. 2010) reaffirm the importance of growth in smallholder productivity for achieving development impacts.

Globally, agriculture is one of the few industries that remains overwhelming based on a family firm model; that is, farms are owner-operated and rely largely on family labour. This is true in both poor and rich countries although average size of a family farm varies widely from around 1 ha in Asia to 180 ha in the USA.

Three reasons are often advanced for the efficiency of the family farm. First, family workers are more likely to work hard than wage workers who require costly supervision given that agriculture is spatially dispersed. Second, family farms have considerable flexibility to adjust labour supply to the seasonality and annual variability of production since family labour can more easily be reallocated to other tasks on and off the farm. Finally, owner operators have an intimate knowledge of local soil and climate, often accumulated over generations, that gives them an advantage in tailoring management to local conditions.

Yet disillusion with the limited success of smallholder-based efforts to improve productivity in sub-Saharan Africa (Collier and Dercon 2009), and the apparent success of Brazil in establishing a vibrant agricultural sector based on much larger farms, have led some African countries to view the development of large-scale mechanized farming as the path to modernization of the sector. This emphasis on large farms has been re-enforced by a dramatic rise in private investment into agriculture and a surge in interest in farm land which has often been labelled as a 'land grab'. This raises issues concerning potential development impacts of large farms, in particular whether they can help generate employment, provide access by small producers to new technologies and markets, and whether public policy can or should regulate such transfers in order to promote broader development.

Changing Farm Size in Land-Abundant Regions

The largest crop-based farms in the world are now in developing and transitional countries. With operational units that often exceed 10,000 ha, they are bigger than the largest farms in comparable land-abundant regions in developed countries such as the USA and Australia. Many large operational units are further horizontally integrated into 'superfarms' that control hundreds of thousands of hectares with the largest now approaching a million ha of good...

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